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LATEST DEVELOPMENTS ON PPP LOAN SAFE HARBOR RELIEF AND GUIDANCE ON GOOD-FAITH CERTIFICATION

Thursday, May 14, 2020   (0 Comments)
Posted by: Sabrina Hidalgo
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MAY 13, 2020 – Earlier today, the US Treasury and Small Business Administration (“SBA”) updated its FAQ’s on the Payroll Protection Program (“PPP”) with the addition of FAQ #46.
 
FAQ #46 states: “"[a]ny borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith."
 
This safe harbor should provide religious institutes comfort if they borrowed less than $2 million dollars through the PPP.
 
Further, the FAQ further delineates that for borrowers who received PPP loans greater than $2 million dollars, “i]f SBA determines in the course of its review that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, SBA will seek repayment of the outstanding PPP loan balance and will inform the lender that the borrower is not eligible for loan forgiveness. If the borrower repays the loan after receiving notification from SBA, SBA will not pursue administrative enforcement or referrals to other agencies based on its determination with respect to the certification concerning necessity of the loan request. SBA’s determination concerning the certification regarding the necessity of the loan request will not affect SBA’s loan guarantee."
 
This is a noteworthy enhancement for borrowers vis-a-vis the US Treasury’s and SBA’s earlier statements regarding eligibility. 
 
The link and full text of FAQ #46 may be found by Clicking Here

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